“The third quarter of 2023 allowed us to move forward on several fronts of our extensive transformation agenda and brought us some of the first signs that we considered relevant to confirm our diagnoses, as well as the priorities we chose to restore our profitability. We know that the journey is long and will bring several challenges ahead, but we also know that each small step forward is essential for overall success. Throughout this quarter, especially, we have begun to see improvements in some of the market and operational dynamics that we widely discussed in the previous quarter, which is the solution we consider to be crucial as we head toward this journey”, reads the management’s statement.

Third Quarter Results

In the third quarter of the current fiscal year, Alpargatas’ net revenue amounted to 896.2 million Brazilian reais (167.1 million euros), which reflects a decline of 17.8%, on a comparable basis to the same period of 2022, mainly caused by a 21.8% drop in volumes sold.

Havaianas’ net revenue decreased by 17.8% in the third quarter, as compared to the same quarter of last year, totalling 884.7 million Brazilian reais (164.9 million euros). At home, the flip-flop’s brand recorded a fall in net revenue of 15.2% year-over-year to 707.0 million Brazilian reais (131.8 million euros), whereas internationally its net revenue plunged by 26.0% year-over-year to 177.7 million Brazilian reais (33.1 million euros).

Meanwhile, Rothy’s registered a net revenue of 30.4 million Brazilian reais (5.7 million euros), down by 20.3% year-over-year, thanks to “lower e-commerce traffic”.

In the three months to the 30^th of September, Alpargatas’ gross profit declined by 29.7% to 361.1 Brazilian reais (67.3 million euros), on a comparable basis to a similar period of 2022. Accordingly, its gross profit margin contracted 7 percentage points year-over-year to 40.5%.

The parent company of Havaianas and Rothy’s also posted a net loss of 8.5 million Brazilian reais (1.6 million euros) in the third quarter of the year, as compared to the net income of 44.2 million Brazilian reais (8.2 million euros) recorded in the same period a year ago. Normalised net income (excluding the effect of extraordinary items net of income tax), however, totalled 4.6 million Brazilian reais (857.5 million euros), decreasing from the 45.8 million Brazilian reais (8.5 million euros) registered in the third quarter of 2022.